The United Kingdom will extend Generalized Scheme of Preference (GSP+) benefits to the Philippines despite exiting the European Union, British ambassador to the Philippines said.
Although the Philippines can still enjoy duty-free access to the UK market once it breaks its ties with the EU, Ahmad said consumers can expect expensive British goods in the shelves.
“The British government said that where we have GSP+ arrangement already, we will continue them, that’s the first thing [assurance]. And the Philippines is on the list, that’s the one assurance,” Ahmad said in an interview.
Ahmad, however, said that the price of the British goods may not go up if the European Union ratify a free trade agreement with the Philippines before Britain’s exit from EU is completed.
”If they finish the negotiation by the time we leave, we will simply adopt it,” Ahmad said, adding that if the EU fails to ratify immediately the FTA agreement, it will have a huge impact for British goods in the Philippines.
He noted that all of the UK’s trade negotiation for the last 43 years or since joining the union, it was the EU who did all the negotiations for them.
“Instead of 28 countries negotiating separately, we asked the EU to negotiate for us. In all our trade negotiations in the last 43 years, or since the UK became a member of the EU commission, we haven’t done any trade deals ourselves,” Ahmad said.
“The EU Commission does it in behalf of us. Anything about trade they deal with it,” he added.
He said that the United Kingdom considers the Philippines as the fastest market in the world.
Since the Philippines can still export local goods to the U.K with zero tariff under the GSP+, without the FTA, the British government will have a hard time as they would pay higher taxes to be able to send its products to Manila and other Asian countries.
“Actually it will damage more the UK than the Philippines. We will be losing the opportunity of selling goods to the Philippines,” Ahmad said.
The UK is one of the Philippines’ largest European trading partners, with exports of goods and services reaching about £510-million in 2013.
Bilateral trade in 2014 hit $1.2-billion with UK goods exported to Philippines valued at $601.2.
In 2015,UK export of goods went up by 44-percent. There are about 200 British companies doing business in the Philippines, including such well-known brands as Unilever, Shell, HSBC, Standard Chartered, AstraZeneca, Diageo, Arup, JCB, Marks and Spencer, River Island, Halcrow, and Costa Coffee.
Other popular UK companies that have been long established in the Philippines include Speedo, Clarks. The Body Shop; and fashion retailer Topshop.
To address the possible problem in case the EU fail to ratify the FTA, Ahmad said that both the Philippines and the U.K. are planning to forge a bilateral free trade agreement.
The bilateral free trade agreement however will start once the British government had completed the Brexit, a portmanteau of “British” and “exit.”
He added that by the time they start negotiating a bilateral FTA with America, Australia and other countries, “it will take a while before we get to the Philippines.”
Ahmad also called on the EU to speed up the ongoing negotiations with the Philippines.
“That’s why we want to encourage the EU to speed up, because if they finish like the one with Singapore and Vietnam, (I’ll say) ‘thank you very much, we will just carry on,” he said.
The trade leader from the EU and the Association of the Southeast Asian Nation (Asean) have agreed to a framework encompassing the parameters of a future ASEAN-EU FTA.
The regions also agreed to organize expert meetings in new areas of cooperation such as public procurement, e-commerce, and simplifying trade for small and medium-sized enterprises.
In 2007, the Asean and EU began negotiating for free trade agreemnt but the talks broke off two years and seven rounds later, due to Myanmar’s human rights violation.
Also in March, the EU and the Philippines has started bilateral trade negotiations, amidst alleged extrajudicial killings in the country.
In the same month, British Prime Minister Theresa May has given formal notice that Great Britain and Northern Ireland is leaving the EU after 44 years of membership.
The six-page letter sparked the process of negotiations on the terms of withdrawal which is expected to last for two years.
The decision to break away from EU happened after the June 26, 2016 referendum when 52 percent of Britons voted to leave the leave the unioni. Ahmad described Brexit as a “divorce” proceeding, which he said is usually painful.
“We have this expression which says ‘Global Britain’, what does that mean, it means that the clear implication of Brexit is that we can’t just do the easy things and just selling across into the EU,” Ahmad explained.
“We have to look for commercial opportunities and beyond.”
Ahmad said that there is a potentially positive effect on UK interest in the Philippines. He said that it is expected that more business delegations will come the Philippines to find a new market.
“When we start our discussion on the Philippines as an emerging power, our biggest emphasis is, we knew that’s where the upside are in terms of more investments, more commerce, more options to do things with each other,” he said.
He added that the British businessmen are also eyeing to expand their businesses here in the country.
“So for the Philippines, there is only a positive impact, I can’t think of any negative impact, because we are not part of Schengen (visa); our immigration issue are nor touched; so if our migration is not touched, if the GSP+ is not touched, and if the currency is still sterling, and we are already present here and we are looking to expand, what we will see is what we are seeing now is more business delegations will come here,” Ahmad said.
Under his watch, Ahmad said that the diplomatic relationship of both the U.K. and the Philippines has “changed dramatically”.
“I really feel a sense of achievement and accomplishment. So many things happen in very positive way. Britain has been well known but I don’t think it’s not foremost in the mind of the people, the government, (and) i think we change that quite dramatically,” he added.
He cited the most recent investment in the country was Dyson, a British technology company that designs and manufactures household appliances.
Ahmad said Dyson inquired at the British embassy in Manila and expressed its desire to establish a new manufacturing plant.
“They got one in Malaysia and they are looking for another option. They are looking for Mexico and the Philippines, they chose the Philippines. It has been successful and they want to build more here,” he said.
The U.K remains the number one investors in the Philippines from the EU, establishing businesses in oil and gas; banking and insurance, manufacturing, and automobiles, among others.
“I’ve seen growth in the last 12 months. And once the (Philippines’) economic plans unfold, I think it will step up even more,” he said.
Ahmad, who would step down four year after his appointment in 2013, is famous for his ability to speak Filipino fluently.It has been a long-running tradition at the U.K Foreign Commonwealth Office that British diplomats should learn to speak the national language of their host countries.
Ahmad will end his four-year tour as British envoy to the Philippines in July 31, 2017 or one week after President Rodrigo Duterte delivers his State of the Nation Address.
He speaks seven languages and learned Tagalog in seven months.
Ahmad is also known for being very vocal about his views on the Philippine’s foreign and local policies, particularly about President Rodrigo Duterte’s bloody war against illegal drugs and his plan to reimpose death penalty in the country.